McMechen roofing contractor sentenced for fraud
WHEELING, WEST VIRGINIA – Roofing and general contractor Stephen J. Gretchen, 45, of McMechen, West Virginia, was sentenced today to 12 months and 1 day in prison for failing to report cash payments to his employees and fraudulently collecting insurance benefits for staged damage to his vehicle, United States Attorney William J. Ihlenfeld, II, announced.
Gretchen knowingly underreported the wages, tips, and other compensation that he paid to his employees. He paid certain employees in cash “off the books.” He filed quarterly tax returns which failed to report these cash payments and failed to withhold certain tax amounts on behalf of his employees. In the second quarter of 2011, Gretchen reported that he paid no wages, tips, or other compensation to his employees. In fact, he had paid approximately $22,880.00 to his employees.
Gretchen owned a 2011 Coachman Freedom Express camping trailer. An investigation revealed that he paid one of his employees to deliberately and repeatedly crash a dump truck into the trailer, causing damage that totally destroyed the camping trailer for insurance purposes. Gretchen filed a claim with his insurance company, but falsely reported that the damage was caused by a hit-and-run accident. The insurance company sent Gretchen a check for $27,776.85 via FedEx in June 2012.
Gretchen pled guilty in January 2015 to one count of “Filing a False Form 941, Employees’ Quarterly Federal Tax Return,” and one count of “Mail Fraud.”
Assistant U.S. Attorney Robert McWilliams prosecuted the case on behalf of the government. The Internal Revenue Service-Criminal Investigation, the United States Postal Inspection Service, and the West Virginia Offices of the Insurance Commissioner, Fraud Investigation Unit investigated.
U.S. District Judge John Preston Bailey presided.